City wants more leeway to tax
By Treena Shapiro
Advertiser Staff Writer
Mayor Jeremy Harris is asking the Legislature to grant the city broader taxing authority so a greater number of residents share the burden of paying for city services.
Since property owners represent less than half the population, "right now a disproportionate share of the burden for city services falls on the back of property owners, because our main source of revenue is property tax," Harris told legislators Friday.
HARRIS
He asked the Senate Ways and Means and House Finance committees to consider giving the counties blanket taxing authority or allow the counties more leeway over specific fees and taxes so they can more fairly spread the cost of paying for city services.
Harris would not say that taxing authority would lead to lower taxes for property owners, but said, "Obviously, money raised from one source will mean less money needed from another source."
Harris said the city this year will be operating on $49 million less in property tax revenue than in 1994, but noted the city has kept its operating budget level despite rising personnel costs. He said the city's fiscal policy has been to hold the line on spending, keep property taxes low through the recession and use special fund surpluses to help balance the budget before raising taxes.
This year, the city faces a budget deficit approaching $180 million and a debt burden expected to double to $233 million over the next five years.
With the state facing its own fiscal crunch, Ways and Means Chairman Sen. Brian Taniguchi said lawmakers will be hard-pressed to allow the counties to levy their own taxes. "Just giving them blanket taxing authority would be kind of rough at this point. I don't know if we'd get the votes for that," Taniguchi said.
Lawmakers probably will consider Harris' proposal, but some of his other suggestions, such as exempting the city from the state excise tax, would be better received, Taniguchi said.
If not granted taxing authority, Harris asked that the vehicle tax be based on value rather than weight; for the counties to be given a share of parking and traffic fines' and to levy a franchise fee on phone companies.
Rather than offer the counties more resources, Taniguchi said lawmakers will be trying to keep their current levels. "At this point, we're not going to touch their (transient accommodation tax) money. Really, from our standpoint, we're trying to keep them at status quo."
Harris said that in 1999 the counties lost about 29 percent of their share TAT revenues.
Reach Treena Shapiro at 525-8070 or tshapiro@honoluluadvertiser.com.
